Tehran – Although news of an imminent nuclear deal between the West and Iran has dissipated following negotiators’ failure to meet a self-imposed March 31 deadline, a sense of optimism continues to prevail among Iranians that a breakthrough could lead to major economic gains once sanctions are lifted.
The United States and United Nations imposed a series of economic sanctions on Iran in 1979, 1995 and 2006. In 2012, the European Union also imposed an embargo on Iranian oil, and froze the assets of Iran’s central bank, leading to major economic difficulties.
Optimism that the nuclear talks will succeed has made the Iranian stock market bullish, and economic analysts speculate that securities will surge much higher if a deal is finalised between Iran and the so-called P5+1 powers – the five permanent members of the UN Security Council plus Germany.
Meanwhile, experts anticipated that the US dollar would lose value against the Iranian riyal.
“Lifting of banking sanctions and limitations on banking transactions will greatly change everything,” Khadijeh Karimi, an independent economic consultant, told Al Jazeera.
Karimi explained that the prices of certain commodities including high-tech goods, oil industry machinery, and aircraft parts, would drop since the country would no longer be forced to buy these goods from middlemen. Foreign investment in Iran would also increase, boosting its economy.
The Iranian government is currently unable to access much of its assets abroad because of the sanctions. Yahya al-Eshaq, the head of Tehran’s Chamber of Commerce, Industries, Mines and Agriculture, recently confirmed in a recent interview that Iran has up to $100bn in blocked accounts in China, India and Japan.
Iran is also storing more than 30 million barrels of oil on its fleet of tankers because western sanctions prevent the sale of Iranian oil, tanker market sources said. Iran produces about 2.8 million bpd, according to a Reuters survey, but is limited to exporting only 1 million bpd due to sanctions.
An agreement with the West will considerably change everything - politically, socially, financially and culturally. Lots of problems that existed for Iranians will be removed including getting visas, travelling to different countries and admission from foreign universities - and even some fields of study Iranians are not allowed to apply to at present.
The US has succeeded in pressuring some of Iran’s biggest customers – China, Japan, South Korea and India – to curtail their imports of Iranian oil. The International Energy Association estimates that Iran could easily produce 750,000 more barrels a day were it not for the sanctions.
Once the sanctions are lifted, according to Vahid Amiri, an oil industry analyst, Iran will gradually be able to sell its stored oil on world markets.
The benefits of a potential deal are not limited to the economy, some Iranians say. “An agreement with the West will considerably change everything – politically, socially, financially, and culturally,” said Azadeh Rajaei, a university instructor teaching French in the Caspian Sea town of Babolsar.
She argued that, economic benefits aside, Iran and its people would be treated with more respect by the international community if a deal is reached.
“Lots of problems that existed for Iranians will be removed including getting visas, travelling to different countries and [gaining] admission from foreign universities – and even some fields of study Iranians are not allowed to apply to at present,” said Rajaei.
Pouyan Sanati, a skin specialist living in Fereydoun Kenar, a Caspian Sea resort, said the removal of limitations on banking activities would enable people like him to attend seminars and medical workshops overseas, adding that he hopes sanctions on importing medicine will be lifted immediately.
Roya Riazi, a retired mother of three who lives in Tehran said excitedly: “God willing, a deal will be made. Then I can support my son who is studying in Canada with ease of mind. You have no idea how difficult it is for me to send money to my son since the banking sanctions went into effect. My son and I are not the only people suffering. The situation of Iranian students abroad will improve and their expenses will reduce once we can send money directly to them.”
But not all Iranians are optimistic about the effects of a deal. Shahrzad Safaei, a director with the International Department of the Bank Keshavarzi (Agriculture Bank) in Tehran, argued: “Suppose there is a deal. So what? We are talking about 36 years of distrust and hostility between two nations [Iran and the US]. Is anything concrete going to happen tomorrow?”
Iran’s Economy and Finance Minister Ali Tayebnia said last January that internal sources release more realistic estimations about the country’s economic performance than international bodies.
“We predict an economic growth rate of 3 to 4 percent for the next fiscal year.”
The figure announced by the minister is at least 5 times more than optimistic estimations released by international bodies, Trend news agency reported.
The latest report released by the World Bank on January 29 estimated that Iran’s GDP growth would be zero without achieving a comprehensive nuclear deal in 2015.
The International Monetary Fund (IMF) also estimated last week that Iran’s GDP growth would decrease from 3 percent in 2014 to 0.6 percent in 2015.
The latest statistics released by the Central Bank as well as Statistic Center of Iran covering spring and summer say that Iran’s GDP growth stood at 4 percent in the first half of the past Iranian fiscal year (ended March 20, 2015).
Ali Rabei, Iran’s minister of labour, cooperative and social affairs, was quoted as saying: “Every one percent growth in the economy could lead to the creation of 100,000 jobs.”
An agreement, whether an interim deal or a comprehensive deal, would also boost Iran’s political standing in the region, said Sohrab Anami, a Tehran-based media analyst.
“The very fact that Iranian officials are at the table with the world’s most powerful countries has lifted Iran’s international image,” Anami claimed, adding that there would also be domestic benefits were a deal to be agreed upon.
“A comprehensive deal would give international legitimacy to the existence of a nuclear programme in Iran, though at a limited and supervised level. But at least the Iranian regime can tell the people that standing against pressure and threats had the benefit of [Iran] becoming the only country in the Middle East with a nuclear programme at this level and scope.”